Richard W. Shepherd
Associate Editor
Loyola University Chicago, J.D. 2019

For the National Collegiate Athletic Association (NCAA), March is supposed to be a showcase of the best about college sports, and the ideals the NCAA claims up uphold.  March is about student-athletes representing their schools, in a tournament full of upsets, uplifting stories, and some of the more dramatic moments in sports.  However, this March, the spectacle of March Madness is overshadowed by headlines of criminal conduct, corruption, rules violations, and plenty of criticism for the NCAA.  While many of these stories are just beginning to unfold, there are several ethical and compliance issues raised, which have application to all areas of compliance.

Overview of NCAA Compliance

During the first official collegiate sporting event—a regatta between Harvard and Yale—Harvard sought to gain an advantage by recruiting non-students.   Thus, the need for the regulation of college sports was born.  The NCAA was founded in 1906 “to protect young people from the dangerous and exploitive athletics practices of the time.” The creation of the NCAA is also often tied to President Roosevelt’s almost-ban of football in 1905, which he had considered because of the dangerous nature of the game.  Instead, President Roosevelt convened a committee of football representatives to discuss a safety agreement—which later evolved into the NCAA.

As the NCAA grew in membership and prominence, the need for regulation grew.  The first NCAA regulation was called the Sanity Code.  Adopted in 1948, the Sanity Code permitted the awarding of scholarships and jobs to college athletes, but only if they demonstrated financial neediness.  In 1956, the NCAA allowed scholarships to be awarded to all student-athletes.

Since then, the NCAA’s rules and regulations have continued to grow in length and complexity.  Most are aimed at protecting student-athletes and maintaining the amateurism of college sports.  The NCAA also regulates student-athletes’ ethical conduct, prohibits any compensation, requires the maintenance of certain academic standards, prohibits participation in outside competition, and heavily regulates the recruitment process.

History of NCAA Sanctions

Mix a complex set of rules and regulations with a billion-dollar industry, and you are going to have rules violations.  The NCAA infractions process includes investigation, enforcement actions, review by the committee on infractions, an appeals process, and a monitoring regime.  The worst penalty ever imposed in the history of the NCAA was the “death penalty” levied on the Southern Methodist University football team.  SMU had produced some of the better teams in college football—however, it did so by bribing high school athletes to choose SMU.  The NCAA, perhaps seeking to set an example, suspended the program for two seasons.

The Mustangs eventually started playing football again, but they did not make a bowl game for over 20 years.  The NCAA has been reluctant to use the death penalty again, even in the wake of the Penn State Jerry Sandusky scandal.

There have been numerous NCAA scandals over the years, with various responses by the NCAA.  Debate over the harshness, or lack of harshness, of the sanctions continues.  More recently, an FBI investigation into college basketball revealed a system of payments to high school athletes and their families, and an impermissible endorsement arrangement with Adidas.  The FBI has further revealed an underground recruiting operation in college basketball, involving several prominent programs, sports agents, and numerous athletes and their families.  The investigation could result in sanctions on 20 universities and 25 players and their families.

The NCAA released a statement claiming the parties involved have no place in college sports and created an independent commission to investigation the allegations.

Ethics & Compliance

The full extent of this underground recruiting operation is still unknown, at least until the FBI concludes its investigation. However, we can still analyze the compliance and ethical questions the situation presents.

The NCAA system of rules and regulations is based on one idea: amateurism.  Collegiate sports are a multi-billion-dollar undertaking, and the only people who aren’t getting paid are the athletes.  In the eyes of the NCAA, this maintains the purity of collegiate sports.  Every rule and regulation promulgated by the NCAA reflects this ideal.

Nevertheless, universities and agents are still finding ways to pay athletes to play at their school.  Many commentators, from athletes to President Obama, have called for the NCAA to be reformed, and feel that the frequent violations are due to an outdated system.

For compliance professionals, this raises some interesting questions.  Is there an ethical duty to comply with rules and regulations that are unfair, unjust, or antiquated?  Further, if a system of rules and regulations is clearly broken, what is the ethical duty of an organization?  These questions could be asked about any area of compliance, but only one industry has thousands of Americans filling out brackets and scrutinizing its every move in the coming months. And with so much uncertainty, the top seed doesn’t matter—everyone loses.

Go Ramblers!